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Opportunity? Market Ambition as Day Trading Volatility Looms

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Opportunity? Market Ambition as Day Trading Volatility Looms

The U.S government shutdown looks like it will take place at 12:01 am EST on Wednesday, this if Washington D.C politicians fail to agree to a funding gap. There have been significant shutdowns in the past, thus financial institutions though not in love with concept are adept at continuing to trade during the events. President Trump’s first term in office produced a long shutdown from the 22nd of Dec. 2018 until the 25th of January 2019. President Obama’s White House had a 16 day affair in 2013. And President Clinton’s administration dealt with a shutdown lasting 21 days.

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S&P 500 Index Three Month Chart as of 30th September 2025

While the financial markets will certainly survive and long-term investors will likely remain rather sedate during this developing saga, day traders need to brace for volatility. Opportunities may develop if Forex, U.S equities and gold see reactions per perceived safe haven endeavors by some investors. However, wagering in markets when shifting tides are happening due to sentiment torrents could prove difficult for speculators. Timing the market and its gyrations caused by potential mood changes poses threats for small traders.

And that is why it will be important to actually remain patient in the coming days. The Democrats appear ready to try and score a political win against President Trump. But what would a win look like? The public is seldom fooled by the government shutdowns. While government offices shutter and economic data publication dates will be postponed, the rest of the world will move forward.

Day traders should not be tricked into panic. Nor should they react too fast based on fears that are not legitimate. The U.S major indices may languish during a government shutdown, but it is also conceivable that they may perform rather well. The Nasdaq 100, S&P 500 and Dow Jones 30 are all within sight of their highest realms. The USD may find some buying action, but just like trades that have already been digested into the market when the Federal Reserve’s FOMC decisions are anticipated and acted upon, speculators should be prepared for counter-intuitive moves. In other words do not be surprised if sudden reversals in Forex via the USD develop.

Traders looking for discounts to emerge will need to be careful, but if the equity markets were to suffer a strong downturn on heightened nervousness, having a longer-term approach to speculative positions could become worthwhile. Gold which is traversing within record values may prove to be a significant near-term barometer as a safe haven gauge in the coming days. But then again gold has been within a sincere bullish trend over the long-term, so buying if produced near-term needs to be looked at suspiciously. In other words, the bullish trend in gold while getting perhaps an additional dose of fuel to ignite higher because of the potential U.S government shutdown should also be treated carefully and not traded with blind ambition.

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Gold Three Month Chart as of 30th September 2025

The potential of a U.S government shutdown is a big event, but it is intransigence that financial institutions and big investors do not want to see. As long as some aspects of communication are being shared transparently with the public regarding negotiations in Washington D.C, many markets are likely to remain rather unbothered. How long will the U.S government shutdown last this time? It might all depend on how long the Democrats believe they can get the most out of the shutdown if it adds to their political image.

Both the Democrats and Republicans will want to get through the coming days as unscathed as possible. Why? Because both want to retain their power. One question waiting to be answered during this conundrum is who will come out looking best? If the financial markets begin to suffer there will be a lot of finger pointing by both sides. And again, importantly, financial institutions are unlikely to be fooled. Investors want clarity, the markets will only suffer if big players feel the crisis in Washington can cause potentially long lasting damage.
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Market Volatility Shelf Life Doesn’t Have an Expiration Date

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Market Volatility Shelf Life Doesn't Have an Expiration Date

Updated: Apr 11

An associate in the financial world just wrote to me that “all bets are off”. Perhaps that is a solid way to think about the present speculative and investment situation. The tumultuous wave of hysteria in equity indices, Forex, commodities and U.S Treasuries are evident to everyone. President Trump’s tariff policies released last week lacked precision via perspectives for many investment institutions who suddenly had their mirage of calm destroyed. The realization that President Trump was undertaking what he had promised caught many by surprise who thought he was bluffing. Trump’s ‘Art of the Deal’ tactics are now being confronted by middlegame chess strategies from opponents.

While the broad markets have boiled and folks look for calm to return, the prospect that current volatility has the potential to carry a long shelf life with no expiration date has to be considered. Yes, the financial world will become serene again. The return of semi-tranquil trading has been seen in the Nasdaq, S&P 500 and Dow 30 the past couple of days – only because the losses and gains depending on the index have been moderate compared to last Thursday’s and Friday’s results.

Yet the shadow of more violent trading remains crystal clear. China and the U.S are now exchanging loud threats which include higher tariffs and retaliatory measures. The USD/CNY is under scrutiny as devaluation by China appears an evident threat. And U.S Treasuries are being watched as some contemplate that China is undertaking a selloff of U.S bonds. Higher U.S yields on long-term Treasuries will create pressure via the amount of debt the U.S will be obligated to pay.

Vice President J.D Vance’s peasant comments about China were not helpful on Tuesday. Why must a hornets nest must be stirred up? China has now been hit with a 104% tariff from the U.S, this while China has vowed to ‘fight till the end’ in its media. Asian markets are selling off cautiously this morning as tensions reignite. Forex pairs such as the USD/SGD, USD/ZAR and USD/BRL should be watched as a barometer not only by currency traders, but by those who want metrics regarding how global economic sentiment and credibility of policies are being contemplated. Risk adverse trading in emerging markets will cause harm and has the earmarks of looking like a stiff penalty for nations trying to develop and raise their standards of living.

While the start of this week has been smoother in relative terms compared to last week, the lack of a comprehensive end game is still missing. There is merit to treat current circumstances with cautious respect. The mid-term outlook remains highly questionable as President Trump and his negotiation gambits are tested publicly.

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Gold One Month Chart as of 9th April 2025

Gold has stumbled back to the 3000.00 USD level, WTI Crude Oil is down and these two commodities are intriguing as a looking glass into the hearts of large players. Are people selling gold short-term because they believe inflation will lessen because of a recession which some are forecasting, or is it merely a speculative move? Gold certainly carries an important risk adverse power and its lower move showed be looked upon skeptically.

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WTI Crude Oil One Month Chart as of 9th April 2025

Is WTI Crude Oil selling off because there is a belief there will be less demand due to fear tariff policies will influence a stumbling global economy? This viewpoint is plausible, the price of the commodity falling below 60.00 USD is a warning that large players are not comfortable with their outlooks and view downside risks as legitimate. The energy selloff in the past couple of hours is a negative barometer for what potentially is in store the remainder of the day in the broad markets.

The lack of finesse exhibited during these tariff negotiations is not palatable, the taste in the mouths of financial institutions has them worried. And outlooks via talking heads and analysts must be treated carefully by traders, this as they try to digest the onslaught of information and complex economic scenarios. Importantly, day traders should avoid getting caught up in the deleveraging talks surrounding the notion that large financial institutions will now pull money out of their U.S based investments in companies via stocks and Treasuries. Traders need to consider the bias of the people they are listening to and reading, and consider the scope and might of the U.S economy mid and long-term. There will be value found after the massive selloffs.

As a side note Warren Buffett has let it be known for a while he is sitting on a large amount of cash via Berkshire Hathaway. And folks should note that the annual meeting for Berkshire Hathaway is on Saturday the 3rd of May, which means people should get ready for insights from Buffett and his legions of admirers in the coming weeks. Certainly, Buffett’s comments and potential actions will be watched carefully.

The U.S Federal Reserve has taken a wait and see approach to the Trump tariff implications. Calls for an immediate cut of the Federal Funds Rate have not caused Fed Chairman Jerome Powell to shift his cautious stance yet. The coming days could bring a different attitude from the Fed if equity markets and U.S Treasuries perform badly. In the meantime some central banks have said they might become more proactive – the Reserve Bank of New Zealand cut its interest rate by 25 basis points this morning to 3.50% and said it will continue to cut their Official Cash Rate if tariff policies create more negativity.

The consideration by financial institutions regarding the beginning of a paradigm shift of the global economy is justified. However, the ramifications of the Trump tariff policies have a long way to go before these present days will be able to be pointed to as the moment the world decided that it no longer wants to participate in the U.S marketplace. That notion seems farfetched. The USD remains the world’s reserve currency, its corporations remain extraordinarily large and valuable, and U.S Treasuries as they absorb current volatility and see yields moving higher in the 30 Year bonds cannot be viewed as an economic apocalypse – yet. Yes, the warning signs are meaningful and the Trump White House will need to respond diligently.

Again, the past week of trading has seen vast disarray, but we have been here before. It is important to recognize that current circumstances however do remain dangerous, this because we are still in the midst of the crisis. At some point, egos will have to be put to the side. The Trump White House will have to negotiate with China. China may be vulnerable, but so is the U.S. Why be belligerent and show no respect to each other? The remainder of this week’s trading will produce more whipsaw results. Selling looks to be in vogue once again this morning. Behavioral sentiment and understanding its power need to be contemplated as folks await sunnier days.

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Trump Bounce Potentially Coming This Week in Equity Indices

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Trump Bounce Potentially Coming This Week in Equity Indices

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S&P 500 Three Month Chart as of 19th January 2025

Trump: U.S equity markets will be closed Monday for MLK Day. Upwards momentum developing this week as Trump White House takes power would not be surprising.

Retail traders need to know that U.S equity markets will be shuttered on the 20th of January because of the Martin Luther King Jr. holiday. Importantly tomorrow is also the United States Presidential Inauguration. Donald Trump will retake power of the Executive Branch of the U.S government at noon in Washington D.C as he is sworn in as the 47th President. U.S stock markets have produced choppy results the past few months but still remain in sight of highs. It would not be a shock to see optimistic momentum develop on Tuesday in the U.S stock markets near-term.

Yes, financial institutions have known Trump will be taking the White House for two and a half months and have had plenty of time to already react regarding their outlooks. However, from a behavioral sentiment standpoint it is easy to deduce that Trump’s coming inauguration speech tomorrow will deliver a confirmation of his economic policy intentions. Financial institutions near-term may produce optimistic upwards trajectory and they may have psychological targets which take into account late November and early December 2024 highs in the S&P 500.

The coming week will also be light on U.S economic data, except for the weekly Unemployment Claims on Thursday, Flash Manufacturing PMI and Existing Home Sales on Friday. Meaning the week will be driven largely on sentiment generated via President’s Trump’s actions in the coming days. Trump is expected to deliver a series of Executive Orders which will affect outlooks and likely be reflective of his campaign rhetoric spoken the past year.

Retail traders should not bet blindly on upside via CFDs for the S&P 500, Nasdaq and Dow 30. Near-term prices are not guaranteed to move higher, but there is reason to suspect buying might prove positive. An interesting barometer for price action will certainly be seen via future contracts early on Tuesday morning as financial institutions return to full volume and get set to return after a long holiday weekend. Risk taking tactics should include price targets that are realistic and not be leveraged wildly.

Forex conditions may prove volatile this week, and traders need to remain cautious about betting against the strength of the USD which has been ferocious the past three months. U.S Federal Reserve outlook remains murky and cautious, and nervousness regarding Trump’s intended foreign policy changes including trade negotiations still have to be fully demonstrated. USD centric risk bullishness likely still has ammunition which will be displayed in the coming days.

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Federal Reserve Expected to Sound Guardedly Cautious Tmrw

by with No Comment Behavioral SentimentCentral BanksFeatured Highlights

Federal Reserve Expected to Sound Guardedly Cautious Tmrw

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EUR/USD Five Day Chart as of 17th December 2024

Large traders are clearly bracing for the Fed tmrw as Forex produces volatile tight ranges. A rate cut is expected, but cautious Fed rhetoric will likely follow.

Forex has been a dangerous wagering ground for retail traders since the end of September. Financial institutions which clearly were betting on a more dovish Federal Reserve starting in early summer becoming a central theme into 2025 have been proven half right, this as the Fed has cut interest rates and is expected to do so tomorrow. However, being half right leaves the door open to also being half wrong, and financial institutions have reacted to this by becoming aggressive buyers of the USD since late September as perspectives have changed. The strong USD trend the past two months plus has hit some speculators hard.

The election of Donald Trump added a strong dose of impetus for USD buyers, this as the President-elect’s tough rhetoric regarding tariffs caused reactions and fear of unknown consequences. In the past couple of weeks more tranquil Forex trading has emerged and the USD finally started to give back some of its gains, yet the USD versus most major currencies, like the EUR/USD, remains within the the stronger elements of it range. While the Fed is expected to lower its Federal Funds Rate tomorrow by 0.25 to 4.50% tomorrow, traders need to remember this has been priced into Forex already. Tranquil trading the past two weeks indicates financial institutions have readjusted their outlooks to the incoming White House administration.

Now it is time to see if the U.S Federal Reserve has started to adjust their outlooks to what a Trump Presidency means. And financial institutions are keen to better understand the outlook of the U.S central bank. Inflation numbers while traversing lower are still rather stubborn and this may will not help the Fed’s mid-term mindset regarding interest rate cuts. GDP in the U.S has remained steady, and there is the potential the economy in the States will improve under Trump. Unemployment numbers while showing signs of weakness have not been terrible either. So while the Fed’s current Federal Funds Rate is higher than normal taking into consideration the historic average the past ten years, they still may not feel they have enough ability to cut interest rates too much more without sparking inflation.

A January rate cut seems unlikely at this time. If the Fed does sound guardedly cautious tomorrow, retail traders may see the USD get initially weaker due to the Fed rate cut, but then see a storm emerge and USD centric strength reappear all in the same day – perhaps in the span of minutes. Speculators need to understand that financial institutions have already baked tomorrow’s interest rate cut into the cake. So it isn’t the rate cut tomorrow that is important if it happens (if it doesn’t then that’s another story); it is what the Fed says and traders should expect them to be very cautious – because per the recent trading of the USD and a barometer it appears financial institutions are bracing for a more vigilant Fed.

Just like he has with many folks he views as uncompromising before, Donald Trump may begin to feel Federal Reserve Chairman Jerome Powell is not on his side regarding interest rate policy. If the Federal Reserve chooses to sound hesitant to cut interest rates in early 2025, it will be rather intriguing to see President-elect Trump’s response. Could a confrontation between the White House and Federal Reserve be in the cards over the next six months?

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Forex: Trump Effect and Reasonable Trading Caution for All

by with No Comment Behavioral SentimentEconomic CalendarFeatured Highlights

Forex: Trump Effect and Reasonable Trading Caution for All

The Forex market the past two months has created a profoundly stronger USD against many major currencies. The combination of late September intrigue regarding U.S Federal Reserve outlook, then nervousness about the approaching U.S election, followed by the subsequent results have been a dumpster fire for many speculators looking for a sustained return to USD centric weakness. Hopefully risk taking tactics have included a solid dose of caution.

This week’s Non-Farm Employment Change numbers scheduled for Friday may give financial institutions a moment to focus on economic data instead of President-elect Donald Trump’s loud pronouncements, but the effect may prove to only be momentary. It isn’t data that is driving Forex for the moment it is nervousness and fear of the unknown.

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USD/BRL Three Month Chart as of 3rd December 2024

While many financial institutions and speculators trade only the major currency pairs, taking a look at the less obvious and more infrequently transacted major currencies may provide retail traders additional perspectives regarding the fragile nature of Forex. Many nations and large institutions are demonstrating concerns about possible sea changes to U.S foreign economic policy. Yes, the EUR/USD, GBP/USD and USD/JPY have all seen volatility via USD strength the past two months, but price velocity in the USD/BRL, USD/RUB, and USD/INR may be equally intriguing. And prove that mid-term forecasts (or lack of them) are causing bedlam for all.

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USD/RUB Three Month Chart as of 3rd December 2024

While it is more than probable calmer heads will start to be seen in Forex and weakness eventually will return to the USD, trying to pick the exact moment this is going to happen remains a guessing game. Financial institutions via evidence in current Forex pricing remains rather cautious regarding their cash forward commercial enterprise. President-elect Donald Trump has certainly been dealt with before and his negotiation style is that of a businessman, it is not a coincidence that some global leaders who do not exactly see eye to eye with Trump are giving him respect because they understand he will act upon threats if not dealt with fairly.

Trump’s recent brief rhetoric regarding BRICS and the organization’s public consideration of creating a new currency to compete with the USD did not go unnoticed this weekend. Critics may want to proclaim Trump’s threats as belligerent, but BRICS is free to create a new currency still if they wish. While Trump cannot stop the birth of a BRICS currency, he can certainly try to initiate actions (via sanctions) against nations that attempt to create a new unified currency which tries to curtail the dominance of the USD. It would certainly help Trump’s bargaining position and the USD also, if better fiscal policy is practiced by the U.S Treasury and government.

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USD/INR Three Month Chart as of 3rd December 2024

It needs to be pointed out that Trump’s warning to BRICS may not be needed. Even though the organization may be able to create a currency based on a commodities backbone, the lack of trust many financial institutions and nations would feel towards a non-transparent fiat currency powered by the fiscal monetary policies from the likes of Russia, China, Brazil and South Africa remains a difficult sell. Until many changes happen domestically within these nations via governance, creation of a BRICS currency remains wishful thinking.

Getting back to the big picture and the volatility recently seen in Forex. While the major currencies teamed against the USD have certainly faced hectic conditions, the fluctuations have not been unexpected. Day traders need to understand the month of December is likely going to remain choppy and see a test of technical support and resistance levels that are wide and full of fast reversals.

The question for the EUR, GBP, and JPY is if most of the negative inputs into these currencies has been factored into value. The suspicion may be yes, and that strength may rightfully appear in these big three sooner rather than later. However, the approaching holiday season and potential bluster from President-elect Trump will not make this a comfortable or easily wagered avenue.

Short-term retail traders looking to take advantage of the bloodbath created in Forex the past two months who seek opportunities should focus on perceived targets which aren’t overly ambitious. The coming U.S jobs data this Friday may allow the U.S Federal Reserve room to cut the Federal Funds rate on the 18th of December by another quarter of a point. As a point of attention, the European Central Bank will announce their Main Refinancing Rate on the 12th of December. The ECB’S actions may be a solid clue regarding the Fed’s approach to upcoming policy.

However, even if an interest rate cut were to take place via the Federal Reserve, it is likely the cut has already been factored into Forex. Which also highlights the high degree of nervousness that exists because of fears which permeate due to Donald Trump’s tough negotiation stances which have been made public. Meaning those who are looking for USD centric weakness to emerge still need to rely on a shift within behavioral sentiment to occur that is not generated because of the Federal Reserve. Nations need to show a willingness to amend existing trading agreements with the U.S, allowing for changes to internal policies regarding exuberant price duties they place on U.S goods in their own countries.

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Nervous? Central Banks Cautious, FX and Asset Equilibrium

by with No Comment AssetsBehavioral SentimentFeatured Highlights

Nervous? Central Banks Cautious, FX and Asset Equilibrium

Sometimes when looking for ideas regarding a risk analysis article it is difficult to find a timely subject. Exaggeration is often used to grab attention. This week and next will not be one of those times. Equities, Forex and commodities have produced nervous results since last Monday. The broad markets appear to be in search of equilibrium, but price velocity while higher than normal hasn’t produced a volcanic surge of pain. Financial institutions were presented less than inspiring jobs data this past Friday and day traders hopefully had their risk management working. Everyone will need to be paying attention this week too.

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Gold One Month Chart as of 9th Sept. 2024

Gold has hovered around the 2,500.00 level and while it certainly is a short-term speculative asset for day traders, the precious metal also serves as distinct barometer of behavioral sentiment and long-term guidance regarding inflation. Recent economic data has created concerns in financial institutions about the potential for a stronger than anticipated U.S downturn. The volatility and sell off in equity indices last week is a clear sign investors would like the Federal Reserve to be more aggressively dovish.

This coming week is packed with a variety of risk events which will keep all market participants engaged. Long-term investors may feel calm as they rely on their outlooks which extend over a handful of years, but anyone who needs a firm grasp on short and mid-term viewpoints might not be comfortable. It is important not to cry wolf too often, but based on the trading results seen the past week it is worthwhile to point to the turbulent outcomes and issue a warning that more volatility could develop.

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Nasdaq 100 One Month Chart as of 9th of Sept. 2024

Some analysts may apply the thought that what we have seen was profit taking, and this can certainly be debated. The coming two weeks have plenty of noteworthy events on the calendar. Besides the listed risk highlights noted below, the Fed will release its FOMC Statement on Wednesday the 18th, the BoE will follow on the 19th and not to be outdone the Bank of Japan will step onto center stage on Friday the 20th of September.

While long-term investors likely believe all variables will return to known price realms and that central banks sooner or later will fall into their proper places regarding monetary policy, day traders who are gambling on short-term momentum must try to figure out where behavioral sentiment is leaning. One of the ways speculators without deep pockets can put the odds in their favor concerning potential profits, is to make sure they are practicing rock solid risk management and not stepping into Forex trades, equity indices via CFDs wagers, and commodities bets when they are displaying rough conditions without being prepared.

Monday, 9th of Sept., China Consumer and Producer Price Index – the inflation reports from China both came in below their estimates earlier today. While some may believe that less inflation than predicted is a good thing, it isn’t when the economy is suffering from deflationary pressures. Lackluster spending from consumers in China continues to highlight negative sentiment about prospects for growth. The USD/CNY is near the 7.1125 ratio as of this writing.

Tuesday, 10th of Sept., U.S Presidential Debate – while not an economic data event, investors might want to pay attention to the answers given by Vice President Kamala Harris and former President Donald Trump. The race for the White House appears to be close according to various polling. It could prove interesting for financial institutions if Harris is questioned about her ideas regarding taxing unrealized capital gains.

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USD Cash Index One Month Chart as of 9th Sept. 2024

Wednesday, 11th of Sept., U.S Consumer Price Index data – the inflation reports will certainly get the attention of financial institutions. If the annual CPI report comes in weaker than the previous outcome, this could spark more USD centric weakness in Forex. All asset classes will react to the inflation numbers because they are likely to play a major part in the Fed’s FOMC decision in one week’s time. The USD Cash Index is still lingering near lows, but for it too resume a more bearish trajectory, financial institutions will need to believe the Federal Reserve is going to become increasingly dovish.

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EUR/USD One Month Chart as of 9th Sept. 2024

Thursday, 12th of Sept., European Central Bank Main Refinancing Rate – The ECB is definitely going to cut its prime borrowing interest rate, the question is how much of a haircut they are going to provide. A 0.25% cut has certainly been traded into the EUR/USD, but many financial institutions believe there is a possibility to see a 0.50% basis cut. Can the ECB and Christine Legarde be aggressive? The European Union remains under recessionary pressures and inflation data is starting to show signs of erosion. The amount of the interest rate cut from the ECB will also be a telltale sign regarding what will happen via the Federal Reserve on the 18th of September. The EUR/USD will react to the European Central Bank’s decision, and global assets in far off places may react too because behavioral sentiment among investors may shift according to the rhetoric provided. Prediction: The ECB will stay cautious and cut by 0.25%, while saying a November rate cut is likely if economic data remains under pressure. Having said the above, the ECB should cut by 0.50% this Thursday, if they do not – financial institutions will not be pleased unless ECB President Legarde sounds very dovish during her Press Conference.

Thursday, 12th of Sept., U.S Producer Price Index – more inflation data from the U.S will provide investors an other opportunity to glance into the Fed’s looking glass. But if these PPI numbers meet or are near the anticipated results, financial institutions may be reacting to the ECB’s rate decision more because they might believe it is a better clue regarding the Fed’s Federal Funds Rate decision which will come in a handful of days.

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USD/JPY One Month Chart as of 9th Sept. 2024

Friday, 13th of Sept., Japan Revised Industrial Production – this number may not get much attention, but because the Bank of Japan will release its Policy Rate on the 20th, the outcome could impact existing sentiment in the USD/JPY. The Japanese Yen has continued its bearish trajectory and traders who are wagering on more downside should not bet blindly on selling positions because intraday trading remains very choppy. The USD/JPY is now touching values last seen in a sustained manner in early January of 2024, lower values were seen in December 2023, and lower ratios that traversed the 138.000 realm and proved choppy occurred in the spring of 2023.

Saturday, 14th of Sept., China New Home Prices, Retail Sales, Industrial Production – this parade of data from the nation will be important. Foreign investors remain concerned about China’s economic prospects. The deflationary winds that have been blowing in the Asian giant have been well documented. The results from these three reports are expected to be lackluster.

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Forex: Behind the Curtain as Speculative Deja Vu Strikes

by with No Comment AMT MarketsCentral BanksFeatured Highlights

Forex: Behind the Curtain as Speculative Deja Vu Strikes

Friday jobs reports came in stronger than anticipated on the surface, and this led to a roller coaster like ride for Forex traders as results were acted upon by financial institutions. However, a look behind the data shows ‘positive’ results were spurred on by part-time hiring and government influences leading to a notion that jobs numbers were not exactly a ray of sunshine regarding U.S economic health. The suspicious results cause a desire to look for ulterior motives, and to wonder if election year politics are playing a role in the U.S employment picture.

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GBP/USD Six Month Chart as of 9th April 2024

The GBP/USD and EUR/USD are rather insightful for technical and fundamental traders. The currency pairs are languishing as of today’s values near pricing that was seen in the second week of December. Since the ‘announcement’ from the U.S Federal Reserve on the 13th of December that a change in monetary policy would begin to occur in 2024, in actuality nothing has really happened, except government ‘speak’ trying to sound as if everything is understood and in control, while it is clearly not.

Economic data from the U.S and Europe has continued to be soiled by mixed results, and retail speculators looking for a trend to emerge have had to deal with choppy conditions. Financial institutions remain unclear about interest rate outlooks. The Fed while trying to ‘sound’ dovish rhetoric remains locked within a Google engine keyword mantra as they mutter the phrase ‘over time’ when trying to convince people that interest rates will ‘eventually’ be cut.

Last week leading up to the Non-Farm Employment Change numbers, many FOMC members were offering cautious tones about the Federal Funds Rate and warning it should not be changed yet. The implication of the Fed’s verbiage could lead some to suspect they have all practiced statements handed to them by their overlords who are concerned this is an election year and jobs are in jeopardy.

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EUR/USD Six Month Chart as of 9th April 2024

Which leads us back to Forex and all financial assets, as investors try to swim waters which have left fundamental perspectives grasping at data which is not easy to decipher. U.S government policy is practicing fiscal spending that is causing massive debts, and perhaps influencing hiring data which may be more akin to putting lipstick on a pig. Many U.S voters seemingly lean towards electing officials who promise to hand out the biggest ‘social rewards’, while ignoring there will be a price to be paid down the road.

The Federal Reserve in the meantime tries to sound optimistic about inflation eroding, but concerns due to U.S government debt being accrued, and global geopolitical affairs combined with energy policy which is making it more expensive to maintain cheap transportation, efficient agriculture and manufacturing, shadow the Fed’s hopes. WTI Crude Oil remains over 86.00 USD per barrel. Gold is trading at record high values and above 2300.00 USD. Does anyone see the dangerous connections? Equity indices should be watched as a barometer this week.

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USD/JPY Six Month Chart as of 9th April 2024

Monday, 8th of April, Japan Average Cash Earnings and Economic Watchers Sentiment – yesterday’s reports matched expectations regarding wages, but workers surveyed noted their concerns about incremental inflation which is being seen in Japan. The USD/JPY is challenging November higher values and the Bank of Japan has been widely criticized for not raising interest rates more aggressively. However, it is possible the BoJ wants the Japanese Yen to remain within its weaker price range to spark a stronger Japanese economy via exports.

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AUD/USD Six Month Chart as of 9th April 2024

Tuesday, 9th of April, Australia Westpac Consumer Sentiment – the results via the consumer reading came in negative. The AUD/USD like the GBP/USD and EUR/USD is traversing values tested in the second week of December 2023, leading to the feeling of deja vu.

Wednesday, 10th of April, U.S Consumer Price Index – you have heard this before, the inflation reports from the States are going to rattle the financial markets including Forex. The USD is certain to react. Data from the U.S has produced surprises aplenty in the past few months. The Consumer Price Index is important and day traders certainly need to pay attention.

Thursday, 11th of April, European Central Bank – the ECB is not expected to change its Main Refinancing Rate, but many analysts believe they should cut borrowing costs. However, the ECB will likely remain within the camp of choosing to ‘wait and see’. The ECB Press Conference with Christine Legarde has widely become regarded as an opportunity for political speech as much as an economic dialogue. Recent data from the European Union suggests the worst of the recessionary cycle is gone, but German Trade Balance numbers released on Monday were negative, highlighting hurdles remain. Inflation is a worry, and a cut to the interest rate might be able to help spur on economic activity while counting on lagging data to prove proactive policy should be implemented. But this likely is not going to happen and the EUR/USD will remain problematic.

Thursday, 11th of April, U.S Producer Price Index – these slew of reports should be watched carefully. If the data is stronger than expected it is likely a part of the residue caused by higher energy costs that have affected logistics and created more expensive raw materials which are needed to produce goods. It was the higher PPI reports last month that caused dramatic tidal shifts in Forex, speculators should brace for the potential of additional mayhem.

Friday, 12th of April, U.K Gross Domestic Product – last month’s GDP numbers from Great Britain came in slightly higher than expected with a 0.2% gain, this report is anticipating growth of only 0.1%. Traders should take a deeper look at the statistics upon publication and check for revisions to past months. The U.K economy has been struggling, the ‘growth’ results will affect the GBP/USD before going into the weekend.

postN79.1

Forex Volatility and Coming Data Attractions for this Week

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Forex Volatility and Coming Data Attractions for this Week

Nervous trading results have hurt many day traders and likely financial institutions too, as behavioral sentiment in Forex gets blindsided by rather mixed U.S data and the Federal Reserve not giving a definitive answer regarding monetary policy. The violent trading in the USD last week was expected, but the turbulence that many Forex pairs experienced on Thursday and Friday of last week was rather vicious. For all the perceived sophistication of Forex markets via financial institutions, the trading results last week point to a definite fear of the unknown.

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USD/JPY Five Day Chart as of 25th March 2024

While the Bank of Japan finally changed its interest rate policy and moved to a Policy Rate of 0.10% early last week, this did not create selling momentum in the USD/JPY. The Federal Reserve’s dangling of potential interest rates to come this year caused temporary weakness in the USD, but as financial institutions and their clients looked at the prospects for a more dovish Fed they apparently became unimpressed as the days passed.

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WTI Crude Oil Six Month Chart as of 25th March 2024

The Fed seems to be betting on weaker jobs numbers developing, and there has been data which points to part-time jobs increasing, and full-time jobs becoming harder to find in the States. Jerome Powell said last week that if jobs numbers start to show weakness that the Fed would be willing to begin cutting interest rates even if inflation remains sticky. Lagging economic data correlations have not eased the Fed’s problems.

The Fed has also admitted inflation in housing, transportation and food remains problematic. WTI Crude Oil spent much of last week above 80.00 USD per barrel as its price has begun to show signs of rising incrementally again; and there is little the Fed can do about more expensive energy costs should they be seen. Higher costs for logistics will not make anything cheaper. Pricier mortgages, more expensive rent and insurance rates for cars and gasoline is creating serious knock on effects.

And for the sake of acknowledging the screaming prices in Cocoa, please have a look at the chart below which should explain why your chocolate products are going to be more expensive in the coming months. The price of the most delicious commodity in the world has tripled in less than a year’s time and is around 8931.0 USD per metric ton as of this writing.

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Cocoa One Year Chart as of 25th March 2024

Gold turned in a violent week of trading too as it reached 2224.00 last Wednesday, only to fall back to a known value around 2165.00. Day traders are dealing with violent cycles in Forex because sustained trends have been nearly impossible to find. While U.S equity indices are fighting upwards, speculators who are afraid of heights are likely being cautious if they are betting merely on the daily results from the S&P 500, Nasdaq 100 and Dow Jones 30 instead of investing for the long-term.

This week’s coming data from the U.S is important, financial institutions are already dealing with plenty of noise, and they will have to be careful regarding their interpretations regarding the coming economic statistics. Meaning day traders who are speculating in all financial assets should use risk taking tactics that are planned significantly in advance.

Monday, 25th of March, U.S New Home Sales – a slight gain is expected, but mortgage rates continue to shadow the housing sector and cause concerns.

Tuesday, 26th of March, U.S Consumer Confidence via the Conference Board – the reading is anticipating a slight increase. Consumer numbers from the U.S have come in mixed recently. A stronger result than estimated might not be welcomed by traders with bearish sentiment regarding the USD. The Fed wants its cake and to eat it too, they would like to see weaker consumer numbers and a soft economic downturn. If U.S shoppers remain confident this could help sustain inflation. It should be noted too, that Core Durable Goods Orders data will be released one and a half hours before the Consumer Confidence numbers.

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AUD/USD Six Month Chart as of 25th March 2024.

Wednesday, 27th of March, Australia Consumer Price Index – inflation numbers are expected to come in slightly higher than the previous results. Like most other central banks, except for the BoJ, the Reserve Bank of Australia would enjoy seeing inflation erode. The AUD/USD will react to the results certainly, but the price action might prove complicated because of USD centric notions.

Thursday, 28th of March, U.S GDP, Weekly Unemployment Claims, Pending Home Sales, and Revised Consumer Sentiment from the University of Michigan – put bluntly day traders will have to be well prepared for the combination of data from the States. Spectators who do not have large trading accounts and cannot take on a great amount of risk, should seriously consider sitting on the sidelines until most of the data is published. The GDP numbers will be watched carefully, while they are expected to match last month’s total, any surprises will affect the USD immediately in Forex. Weaker growth numbers might cause USD sellers to ignite positions.

However, before traders react too much to the Gross Domestic Product numbers, the Weekly Unemployment data will also impact the financial market. Financial institutions are anticipating a higher amount of unemployment claims this week. Also, at the same time as the growth and jobs numbers, the Final GDP Price Index numbers will be brought forth. The mixture from these reports could cause speculative whiplash.

The housing sector numbers and consumer numbers which come one and a half hours later will finish off a very big day for traders and institutional investors. The wide array of data could make this coming Thursday rather loud, and again rather dangerous for retail traders to participate.

Friday, 29th of March, Japan’s Tokyo Core Consumer Price Index – the inflation numbers are expecting to show a slight decrease to 2.4%. The result should certainly be watched by USD/JPY and GBP/JPY traders. If the number were to come in higher than expected, this could cause additional volatility for the Japanese Yen. Financial institutions seemed to indicate last week they would like to see the BoJ become more aggressive with their Policy Rate.

Friday, 29th of March, U.S Core Personal Consumption Expenditures Price Index – the reading is expected to be below the previous month’s total. Traders should be on the lookout for revisions to past results. Financial institutions know this inflation number is important for the Federal Reserve, but they are concerned the U.S central bank doesn’t have the ability to combat inflation which is not part of the Core number. Energy and food costs which are hurting U.S consumers are not part of this report and likely making the Federal Reserve gun shy regarding monetary policy – which has caused a large part of the USD whipsaw trading results that Forex has experienced.

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Friday’s Forex Violence and Coming Attractions for Traders

by with No Comment AMT MarketsAssetsFeatured Highlights

Friday's Forex Violence and Coming Attractions for Traders

While the past month has continued to produce positive trends upwards for traders speculating on equities via U.S indices with record breaking values, Forex has been rather brutal for many day traders if they have remained stubborn.

Short-term trading conditions in Forex again proved violent this past Friday, as the Non-Farm Employment Change and Average Hourly Earnings reports came in stronger than anticipated and set off fireworks in the major currency pairs.

Fed Chairman Jerome Powell offered a clue to speculators paying attention last Wednesday, during the Fed’s Press Conference in which he spoke about the tight labor market. It seems likely the Federal Reserve knew the jobs data was going to be rather robust and hinted.

The Federal Reserve did continue to speak about interest rate cuts, but they certainly have not given an exact timetable when more dovish policy will begin. This has left many speculators, corporations and financial institutions nervous and the results via choppy trading conditions the past handful of weeks are proof.

USD strength the past month has caused headaches for many Forex speculators, but it needs to be said that many major currency pairs are lingering near values post-December 13th 2023, this was when the Federal Reserve made it ‘official’ that a more dovish monetary policy would develop in 2024.

Early wagers by financial institutions in December indicated they believed a March Federal Funds Rate cut would be seen, but after last Wednesday’s Fed’s FOMC Statement and Friday’s jobs numbers it seems more likely for the moment a May interest rate cut could be a legitimate target.

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WTI Crude Oil Three Month Chart as of 5th February 2024

Risks do Abound and Speculators Should Remain Cautious Near-Term

Inflation concerns via knock-on affects from logistical complications via Red Sea chaos which disrupts the Suez Canal shipping is a legitimate threat and needs to be monitored. However, the price of WTI Crude Oil traded in a remarkably stable manner last week as noise was heard from the Middle East. In early price action this morning the commodity has been polite and remains within sight of 72.00 USD per barrel. The lack of a nervous reaction in Crude Oil thus far could keep global investors calm.

This week will be limited regarding important economic data. However, there will be plenty of rhetoric offered by U.S Federal Reserve members in the coming days via conferences and interviews. Forex traders have needed to combat an array of reversals as price equilibrium has created rather tenacious price realms and this may continue near-term.

There are time periods when traders should be willing to accept that methods regarding short-term trading tactics need to be adjusted. January has shown that financial institutions were of the mindset the USD had gotten too strong. And although it appears financial institutions continue to lean towards a weaker USD outlook in the mid-term (as proven by lower moves in the USD leading up to the jobs report on Friday), the surprisingly good jobs data certainly caused the USD to bounce upwards.

Technical considerations of the USD at this moment are important, fundamental data is still coming in rather mixed, this as financial houses wait on central banks to start reacting with interest rate cuts due to lackluster economic data. It is important to note that some analysts have started to murmur the ECB and BoE may have to move first regarding interest rate cuts – if they have the courage to take this action sooner rather than later. The U.S economy has remained rather strong regarding consumer sentiment and this is causing angst among Fed observers. The U.S jobs numbers on Friday highlighted this nervousness.

Monday, 5th of February, U.S Services PMI via ISM – an outcome of 52.0 is the expected reading, which would be higher than the previous result of 50.6. If the Services number meets its estimate and doesn’t exceed the expectation, this would calm nervous financial institutions which may believe the U.S economy may be too strong for the Federal Reserve’s liking, and cause some hawkisk sentiment regarding monetary policy to linger. A weaker number from the Services PMI could help the USD selloff slightly, a stronger outcome could result in more USD buying short-term.

Tuesday, 6th of February, Australia Cash Rate and Monetary Policy Statement via RBA – no major changes are expected from the Reserve Bank of Australia. Global central banks have taken a wait and see approach as they likely remain nervous regarding the potential of inflation to remain stubborn in the mid-term. The RBA is probably going to follow the ECB, BoE and Fed’s stances from last week and remain conservative.

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EUR/USD Six Month Chart as of 5th February 2024

Wednesday, 7th of February, Germany Industrial Production – though this report is not viewed as a major economic event for traders the results should be watched. The EUR/USD has been hit by rather volatile conditions as financial institutions try to anticipate central bank moves. If the German data comes in weaker than expected (a minus -0.4% result is anticipated) this could make the EUR/USD slightly more bearish.

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Shanghai Composite Index One Year Chart as of 5th February 2024

Thursday, 8th of February, China CPI and PPI – economic data from China has not improved and foreign investors are not showing an appetite for risk. Deflation remains a concern in China, and although the official government rhetoric promised sunnier days ahead, fundamentals in real estate, manufacturing and consumer driven data offers troubled prospects. The Consumer Price Index from China is anticipated to be worse than the previous month’s outcome. The downturn in the SSE (Shanghai Composite Index) is now challenging the 2,700.00 vicinity.

Friday, 9th of February, Canada Employment Change – Canadian economic data has been lackluster and analysts have been quite critical of government policy. Having said this the USD/CAD is largely going to stay in a USD centric mode going into the weekend.

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Trading Optimism for 2024 and Pursuit of Castles in the Air

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Trading Optimism for 2024 and Pursuit of Castles in the Air

Traders may feel like horses being kept in their stables right now. The desire to run freely in Forex and other markets is certainly being felt, this as many analysts have jumped onto optimistic bandwagons and are pointing to the U.S Federal Reserve and its rather dovish outlook for 2024. Gold in early trading this morning is lingering near highs and the USD remains within weaker territory when technical charts are inspected via one month results.

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Gold Three Month Chart as of 2nd January 2024

Yet, thin holiday trading is full in effect. Light volumes will continue to be seen early this week after the New Year’s celebrations. Financial institutions will open their doors today, but their corporate clients around the world will have plenty of employees who will remain on vacation until the 8th of January. Thus, while day traders may feel enticed to wager in the markets with various CFDs, they should be careful and understand unbalanced positions may cause temporary chaos. Risk taking tactics should be carefully considered.

The desire to dream about castles in the air is a source of comfort for many new day traders. But remaining realistic about potential results, while not getting overly ambitious about targets is an important aspect for all speculators. While trends may look attractive in Forex, commodities and equities a well planned approach regarding risk taking is a practical road. Castles in the air tend to vanish.

Optimism will be a word frequently heard in the coming days and weeks, and here’s to wishing everyone a prosperous and peaceful 2024. The potential of a more dovish U.S Federal Reserve regarding monetary policy and declining Treasury yields sparking more risk appetite in equities as investors seek solid returns is alluring, however risks remain on the table. The economy of China continues to worry analysts and tensions in the Middle East are still a long way from being solved.

However, the biggest cause for speculative concerns during 2024 may come from elections in Taiwan, India, South Africa and the United States. Taiwan’s presidential vote is on the 13th of January. China will certainly be watching the results, and traders should expect to hear swords rattling afterwards and then hope the noise calms down.

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USD/ZAR One Year Chart as of 2nd January 2024

Tranquil voting results in India will be welcomed by investors. India is becoming a noteworthy economic giant, its rapid growth and ascension as an important investment vehicle needs to remain stable. South Africa remains troubled domestically by concerns regarding corruption and inefficiency, its upcoming spring election results may not solve the problems it faces. There will be many elections in Africa this year, which could spur on considerations regarding geopolitical alliances and the price of commodities.

The U.S election late in 2024 will start to grow in noise as the months progress and by early this summer behavioral sentiment will begin to become nervous regarding the outcomes for the White House and Congress. The U.S appears to be braced for an election between Joe Biden and Donald Trump and this will certainly cause skittish storms.

Traders should feel confident about risk appetite in the global markets improving, but they should keep in mind that impetus coming from many different spheres can affect the financial world.

Tuesday, 2nd of January, U.S Final Manufacturing PMI – today’s Purchasing Managers Index is expected to show a slight improvement, but the results may fall on deaf ears because many market participants will not be around to react due to the fact they are still on vacation.

Wednesday, 3rd of January, U.S ISM Manufacturing Prices – this inflation survey from purchasing managers may be given a bit of attention, but its effect may be limited because of light trading volumes still being exhibited.

Thursday, 4th of January, Germany Preliminary CPI – the inflation data from Germany will get some consideration, and the result is expected to show a slight increase. Services PMI data will also come from European Union nations, the U.K and U.S.

Friday, 5th of January, U.S Non-Farm Employment Change and Average Hourly Earnings – the jobs reports will get the notice of financial institutions. The results for employment and wages are expected to be slightly weaker than the previous month’s outcomes. Typically these numbers would cause a stir, but unless there are surprises, most financial institutions may not react massively to the reports because it remains a ‘holiday’ week. If the numbers come in weaker than expected this could cause interesting reactions on the 8th of January and weaker USD sentiment.

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Leverage and the Holidays Often Leads to Costly Volatility

by with No Comment Behavioral SentimentCommoditiesFeatured Highlights

Leverage and the Holidays Often Leads to Costly Volatility

This may seem like an unfriendly reminder for this time of year, but holiday trading can lead to dangerous storms for traders. Keeping a realistic viewpoint regarding your ambitions during Christmas and New Year’s is important.

Most day traders cannot afford to have an outlook that is beyond the short and near-term. This is an ugly fact many speculators with less than deep pockets have to acknowledge if they are new to speculating. While large traders and financial institutions can maintain mid and long-term outlooks, day traders who do not have the funds to keep overnight positions need to operate in an entirely different fashion.

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Trends via technical charts and fundamentals are crucial for all traders. Behavioral sentiment is a key ingredient too for all participants chasing assets. However, day traders also need to understand unique risk management limitations. The use of leverage is a vital dynamic, and can cause devastation fast when too much money has been wagered. The use of leverage by day traders effectively raises the probability that a trade will lose money.

Incremental changes in value to a Forex pair, commodity and equity share being traded on a brokers platform by a speculator using ‘borrowed’ money via an account that allows for margin often leads to quick outcomes that fail. Many brokers offer traders ‘polite’ leverage ranging from 10% to 100% in extra funds, this while enticing the speculator to the potential of profiting in a quicker and more robust manner. It should also be noted that when a broker is offering vast amounts of leverage, they are knowingly increasing a traders likelihood of losing. The use of leverage beyond 10% leads to plenty of expensive mistakes.

Unfortunately, the simple truth is if you can make fast money trading, you can lose fast money while trading. The use of the word speculating is simply a gentle way of not using the word ‘gambling’.

Traders tempted to pursue wagers during the next couple of weeks should remember a lack of normal volumes make many asset classes more volatile, meaning the use of leverage by speculators often leads to dangerous gyrations within their accounts.

Risk appetite has taken on a optimistic tone globally because of the upside U.S equity markets have been producing, while U.S Treasury yields are decreasing, but dangers still lurk. Day traders need to remain realistic regarding their pursuit of quick hitting trades during the holiday season, and make sure they use solid tactics while pursuing their outlooks. The trend may appear to be your friend, but short-term reversals in the wrong direction can cost money.

No one wishes for bad things, but speculators should also note that if risk adverse events occur during the holidays, that ‘negative news’ can often become amplified this time of year and cause more volatility. Speculative positions in Forex, Crude Oil and gold can produce rather wild results, and thin trading volumes can add to the swift changes in values.

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AMT Top Ten Miscellaneous Thoughts for the 8th of December

by with No Comment Behavioral SentimentBooksFeatured Highlights

AMT Top Ten Miscellaneous Thoughts for the 8th of December

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10. Book: A History of Venice by John Julius Norwich.

9. Music: Gram Parsons (featuring Emmylou Harris) playing Ooh Las Vegas.

8. Artificial Intelligence: Speed and processing advances will continue to make AI a buzzword in 2024, this as quantum computing looms in the distance.

7. Trading Volumes: Speculators should note there are about two full weeks of trading left before ‘thin’ holiday markets will begin to be seen. Meaning financial institutions while being cautious, will also start to position their assets according to their outlooks for early next year.

6. Energy Sector: WTI Crude Oil, Brent, Natural Gas and Unleaded Gasoline continue to challenge support levels as long-term lows remain in sight.

5. China: Important inflation numbers via Consumer Price Index statistics will come from the nation early Saturday, negative results are expected.

4. Risk Appetite: Optimism continues to be encouraging within behavioral sentiment, this as U.S equities remain near highs, the USD leans towards a mid-term outlook with potential weakness, and gold stays above 2000.00 USD per ounce.

3. USD/JPY: Bearish momentum continues in the currency pair, price velocity built speed yesterday and this morning’s trading has been dynamic.

2. Data: U.S jobs numbers will be released today, the Non-Farm Employment Change and Average Hourly Earnings reports will create reactions. However, unless the results are surprising, this data may simply work as an affirmation for existing risk appetite.

1. Federal Reserve: The Fed’s next FOMC Statement will be on the 13th of December, this knowledge will shadow the broad markets today and early next week.